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March 22, 2022
ITEM TITLE
Emergency Rental Assistance: Accept Re-Allocated U.S. Treasury Funds, a State of California Round 3 Loan Award, Appropriate Funds and Amend the Existing Agreement with SBCS Corporation to Continue to Provide the Emergency Rental Assistance Program
Report Number: 22-0092
Location: No specific geographic location
Department: Development Services
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines 15060 (c)(3) no environmental review is required. Pursuant to the National Environmental Policy Act (“NEPA”), the activity qualifies for a Categorical Exclusion not subject to 24 CFR 50.19(b)(3), (11), and (12) of the Code of Federal Regulations.
Recommended Action
Adopt resolutions: A) Authorizing the Acceptance of Re-Allocated funds from the United States Department of Treasury using funding from the Consolidated Appropriations Act, 2021 and/or the American Rescue Plan Act of 2021 and appropriating funds for the purpose of an Emergency Rental Assistance Program (4/5 Vote Required); B) Authorizing participation in the State of California’s Emergency Rental Assistance Program - Round 3 loan award, including entering into an agreement with the Department of Housing and Community Development, and appropriating funds for that purpose (4/5 Vote Required); and C) Waiving competitive bidding requirements and authorizing a contract amendment with SBCS Corporation to continue to provide an Emergency and Utility Assistance Progra m funded by a temporary cash flow loan from the State of California’s Department of Housing and Community Development using supplemental State and Federal Consolidated Appropriations Act, 2021 and/or American Rescue Plan Act of 2021 funding allocations.
SUMMARY
On January 20, 2022, the City submitted a request for re-allocated funds to the United States Department of Treasury (the “Treasury” or “U.S. Treasury”) in the amount of $14,117,440.62. The funding request amount was derived by using assistance requests that had been submitted by residents using the City of Chula Vista’s Emergency Rental Assistance Program Application ( “CVERAP”) portal. On March 14, 2022, the City was P a g e | 2
awarded $1,045,895.28 from the Treasury based on this request . Although the request is significantly less than what is needed to fund current applications through March 2022, Senate Bill 115 ( “SB 115”) was approved by the California Governor on February 9, 2022, allowing the State of California Department of Housing and Community Development (“HCD”) to provide a temporary cash flow loan (“Loan Award”) to grantees who submitted a request for reallocated funds from the Treasury.
This item seeks approval to: (1) accept the awarded allocation from the Treasury and appropriate said funds in the amount of $1,045,895.28 plus future awards; (2) enter into the State of California’s Emergency Rental Assistance Program -Round 3 (“SRA -3”) Loan Award program in the amount up to $14,117,440.62 and execute required documents and a standard agreement with HCD , allowing for the City and its Program Administrator to continue to provide the CVERAP to eligible households and appropriate said funds; and (3) waive the competitive bidding requirements pursuant to the Chula Vista Municip al Code (“CVMC”) Section
2.56.070(B)(3) and to approve an amendment to the City of Chula Vista’s standard two-party agreement with SBCS Corporation (“SBCS” or “Subrecipient”) to administer the program.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activities for compliance with the CEQA and NEPA. The proposed activities are not considered “Projects” as defined under Section 15378 of the State CEQA Guidelines because the action consists of a governmental funding mechanism or governmental fiscal activity, is not site specific, and will not result in a direct or indirect physical change in the environment.
Pursuant to NEPA, tenant based rental assistance is categorically excluded from any further review.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, and NEPA Code of Federal Regulations at 50.19(b)(3), (11), and (12) these activities are not subject to CEQA or NEPA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Due to the timing of the funding request, the Housing Advisory Commission w ill be provided with an informational presentation by City staff at the next meeting.
DISCUSSION
While significant rental assistance funds have been received by HCD and the Treasury to d ate, those funds have been exhausted and the City has been forced to suspend acceptance of new applications via the CVERAP web-based application portal. To continue the CVERAP program, the City requested, and is receiving, U.S.
Treasury Re -Allocated funds and a n SB 115 Loan Award from HCD. The SB 115 loan program provides temporary cash flow loans to grantees who submitted a request for reallocated funds from the Treasury , thereby providing new funds for the CVERAP, both of which are discussed below.
U.S. Treasury Re-Allocated Funds
To date in 2022, the City has received two additional allocations from the Treasury as described in Table 1 below, of which $409,925.36 was previously approved and appropriated by Council on January 11, 2022, via Resolution No. 22 -0006 and 22 -0008. The City will contract with a Subrecipient, SBCS , to assist with the expenditure of a portion of additional funding allocations to assist low -income residents affected by the COVID-19 Pandemic.
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Table 1
ERAP Awards in 2022
Funding Source
ERA1 Supplemental Federal
Awards
SBCS SubAward
Allocations
CRF-0006 Federal (ERA1)
*Supplemental Reallocation
Funding
$409,925.36 $409,925.36
CRF-0006 Federal (ERA1)
*Supplemental Reallocation
Funding
$1,045,985.28 $1,045,985.28
*Consolidated Appropriations Act, 2021 funding
SRA-3 Loan Award Terms and Conditions
HCD is requesting that the City adopt a Resolution allowing the City to accept an SRA-3 loan award from HCD.
The estimated loan amount is $14,117,440.62; however, HCD has not yet confirmed or allocated this total amount to the City and is therefore not guaranteed as of date . The loan amount was based on the City’s request for re -allocated funds from the Treasury. While the temporary cash flow loan funds may be distributed and expended beyond March 31, 2022, they may only be used for eligible priority groups that request rent and utility assistance on or before this date. Similar to CVERAP, HCD has advised the City that their Emergency Rental Assistance Pr ogram will be ending March 31, 2022, and only process those applications that met HCD’s submittal deadline. The date to expend the funds to process applications received by March 31, 2022, has not been established. The repayment of the temporary cash flow loan will be made using future allocation (s) from the Treasury. In the event the allocation (s) from the Treasury are insufficient to cover the loan amount, HCD will require the City to continue applying for re -allocated funds to be used to pay down the cash flow loan and thereby waive any short falls.
Waiver of Bid Requirements and SBCS Contract Amendment
SBCS, via a current agreement, currently administers the CVERAP program for the City. Accordingly, use of the competitive bidding process set forth in CVMC Section 2.56.070 is impractical and the City’s best interests would be better served by waiving said bidding requirements for the following reasons: (1) given the strict time lines required by the state and federal governments to encumber and expend said funds and the urgent need for said funds by the citizens of Chula Vista ; and (2) SBCS is uniquely qualified to meet the state and federal grant obligations, including, but not limited to, SBCS long hi story of partnering with the City to administer rental assistance programs and complying with attendant state and federal regulations, including the CVERAP program. This action would waive the competitive bidding process and allow SBCS to continue to administer the CVERAP program with the above discussed funding.
Conclusion
The deployment of these additional funds will have a direct impact in assisting residents with basic living expenses such as housing and provide housing stability during this public health crisis. Staff recommends City Council adopt the Resolutions to accept Treasury funds and receive an SRA loan award from HCD. This will allow the City to quickly deploy these funds without having gaps in services and allowing acceptance of applications prior to the deadline of March 31, 2022.
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DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not a site - specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Councilmember McCann may, however, have a conflict of interest given hi s ownership interest in rental property and property management business. Otherwise, Staff is not independently aware, and has not been informed by any other City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current year fiscal year impact to the General Fund or Housing Authority Fund as a result of this action. Approval of Resolution A will accept reallocated funds from Treasury and Resolution B will authorize the repayment of a cash flow loan from HCD using Treasury funds. Both Resolutions A and B authorize the appropriation of said funds in the fiscal year 2021 -2022 budget. All costs associated with the CVERAP program, including preparation of this staff report and administration of CVERAP supplemental funding, are eligible uses of the loan award.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact to the City’s General Fund or the Housing Authority Fund as a result of this action. All costs associated with the administration of CVERAP is covered by the respective loan award.
ATTACHMENTS
1. HCD Draft Loan Award Documents
2. HCD Draft Promissory Note
Staff Contact: Jose Dorado, Senior Management Analyst Development Services Tiffany Allen, Director of Development Services